Insurance Review

Which of the following would NOT be considered a misrepresentation on the part of the insurer?

Backdating policies to secure a lower premium for the insured.

A legally acceptable attempt by an existing insurer to dissuade a current policy owner from the replacement of existing life insurance is called

Conservation

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report.

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

all of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT

The employer can receive a current tax deduction for any contributions made to the plan

which of the following would be deducted from the death benefit if accelerated provision

amount paid with the accelerated

which of the following best describes fixed period settlement option?

both the principal and interest will be liquidated over selected period of time

When a life insurance is cancelled and the insured has selected the extended term nonforfeiture option , the cash value will be used to purchase that has a face amount

equal to the original policy for as long a period of time that the cash values will purchase

which of the following is TRUE regarding the accumulation period of an annuity?

it is a period during which the payments into the annuity grow tax deferred.

If $100,000 of life insurance proceeds were used in an settlement option which paid $13,000 per year

$3,000

The Replacement Regulation does NOT apply to situations in which the total coverage to be replaced represents less than how much of the face amount

$5,000

How soon must the insurer pay a death benefit claim after receiving the proof of death?

2 months

The policy loans provision states that the insurer must advance to the policy owner a sum-up to the policy's cash value after the full amount of premium have been paid for how long?

3 years

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

if a person applies to become a life insurance producer what is the minimum number of hours of pre-licensing education that must be completed in a classroom

7.5

which of the following is NOT true about life settlements?

the seller must be terminally ill

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise term option that is currently $20,000. what would be the face amount of the new policy?

$50,000

An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added to $15,000. At policy surrender, the cash values were $18,000. What part of the surrender value would be income taxable?

A. $50,000 B. $18,000 C. $15,000 D. $3,000 *

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per years, which of the following would be taxable annually?

A. $7,000 B. $3,000 * C. $13,000 D. $10,000

Which of the following would be considered a nonqualified retirement plan?

A. 401(K) B. Keogh pln C. Roth IRA D.Split-dollar plan *

What type of insurance would be used for a Return of Premium rider?

A. Level Term B. Decreasing Term C. Annually Renewable Term D. Increasing Term *

Which of the following is NOT true of life settlements?

A. The seller must be terminally ill. * B. They could be used for a key person coverage C. They could be sold for an amount greater than the current cash value D. They involve insurance policies with large face amounts.

An insured misstates her age at the time the life insurance is taken. The misstatement may result in

Adjustment in the amount of death benefit

which of the following premium modes have the lowest overall payment

Annual

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Beneficiary's Consent

which is TRUE about the cash surrender no forfeiture option

Funds exceeding the premium paid are taxable as ordinary income

What provision in an insurance policy extends coverage beyond the premium due date?

Grace Period

In life insurance policies, cash value increases

Grow tax deferred

The Life Solicitation Rule applies to which of the following

Individual life

Stranger-originated life insurance policies are in direct opposition to the principle of

Insurable interest

Which is the following is NOT true regarding policy loans

Money borrowed from the cash value is taxable

Which no forfeiture option provides coverage for the longest period of time?

Reduced paid-up

In order for a firm to maintain its registration as a legal insurance company, what must it do?

Submit a biennial fee to the director

in insurance an offer is usually made when

The completed application is submitted

All of the following are correct regarding misrepresentation EXCEPT

The fines for misrepresentation range from $50 to $1,000

A life insurance policy does not have a war clause. If the insured a killed during a time of war, what will the beneficiary receive from the policy.

The full death benefit

All of the following are true regarding the guarantee insurability rider EXCEPT

This rider is available to all insureds

What is the main purpose of the regulation on life insurance policy illustrations?

To help customers make educated decisions in buying life insurance

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

A. $100 per violation B. Revocation of license C. $2,500* D. $1,000

Insurance agents are prohibited from referring to themselves as all of the following EXCEPT

Insurance Producer

if the owner of a whole life policy is also the insured dies at 80, and there are no outstanding loans on the policy

A full benefit

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

All of the following are true regarding reinstatement of a lapsed producer license EXCEPT

A producer's license may be reinstated within 24 months without having to pass a written exam.

An insured purchased a 15-year level term life insurance policy with a face amount of $100,000, The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident , and after 10 weeks of hospitalization died from the injuries. what amount would his beneficiary receive as a settlement?

A. $0 B. $100,000 C. $200,000* D. $100,000 plus the total of paid premiums

Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive?

Amount paid with the accelerated benefit, plus the earnings lost by the earnings lost by the insurance company in interest income from the accelerated benefit.

who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has an earned income

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Annual Dividend Provision

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash Option

An insured and his wife are both involved in a head on collision. The husband dies instantly, and the wife dies and the estate receives the benefit of the insured. this indicates that at the life insurance policy had what provision?

Common Disaster

which of the following is NOT typically excluded from life policies

Death due to plane crash for a fare paying passenger

all of the following are prohibited practices EXCEPT

Denial of a claim after a reasonable investigation

which of the following is NOT a term for the period of time which the annuitant or the beneficiary

Depreciation

All of the following would be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer

The provision which states that both the policy and a copy of the application form the contract between the policy owner and the insurer

Entire contract

which no forfeiture option has the highest amount of insurance protection

Extended term

which of the following is an example of an unfair claims practice settlement practice?

Failure to promptly to settle a claim when liability has been cleared.

An applicant is denied information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

Which of the following is NOT true regarding a Certificate of Authority ?

It is issued to group insurance participants

Which of the following is NOT true regarding the accumulation period of annuity?

It would not occur in a deferred annuity.

part 2 of the application for the life insurance provides questions regarding all the following EXCEPT

Other insurance coverage

An insured has a life insurance policy from a participating company and receives quarterly dividends. He instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

Paid- Up Additions

For an individual who is NOT covered by an employee-sponsor plan, IRA contributions

Tax deductible

The interest earned on policy dividends is

Taxable

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

Candy receives a temporary insurance producer license. After 80 days , the owner of the insurance company decides to sell the business. which of the following is true?

The license automatically terminate.

which of the following best describes what the annuity period ?

The period of time during which accumulated money is converted into income payments.

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company

Which of the following statements is TRUE about a policy assignment?

The transfer rights of ownership from the owner to another person.

All of the following are dividend options EXCEPT

fixed-period installments

which of the following best describes annually renewable term insurance ?

it is level term insurance

Which of the following is TRUE regarding the annuity period

it may last for the lifetime of the annuitant

which of the following types of insurance policies would perform the function of cash accumulation

whole life

when an annuity is written, whose life expectancy is taken into account

Annuitant

The Director issued a written notice about a hearing for a business entity. The hearing is scheduled for May 1st. The affected business entity should receive the notice no later than

April 20th

which of the following are TRUE of federal tax advantages of a qualified plan EXCEPT

At distribution all amounts received by the employee are tax free

Duties of the replacing insurer include all of the following EXCEPT

Keep records for 5years

What is the advantage of reinstating a policy instead for a new one?

A. The face amount can be increased B. The cash values have gained interest while the policy was lapsed. C. The original age is used for premium determination. * D. Proof of insurability is not required.

in an annuity the accumulated money is converted into a stream of income in what time period

Annuitization period

The Director regulates insurance rates through detailed rate reviews. The Director will prohibit insurance rates that are

Any of the above

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Conditional

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following ?

Consideration

all of the following are true about the bond requirements in the state of Illinois EXCEPT

Insurance producers with insurance companies that take responsibility for their actions are still required to post bond.

When a beneficiary receives payments consisting of both principal and interest portions , which parts are taxable as income?

Interest only

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off the policy sooner than would been possible otherwise. what dividend option could she use?

Paid-Up option

The Federal Fair Credit Reporting Act

Regulates consumer reports

A 60-year old participant in a 401(K) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

The amount of the distribution is reduced by the amount of a 20% withholding tax.

Which of the following is NOT true regarding the annuitant ?

The annuitant cannot be the same person as the annuity owned.

Which of the following is NOT true regarding the annuitant

The annuitant cannot be the same person as the annuity owner

In which of the following examples would a contract between an insurer and prospective insured be legal?

The applicant has a prior felony conviction

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

If the policy owner, the insured and the beneficiary under a life insurance policy are three different people who has owners rights

policy owner

When an insured makes truthful statements on the application for insurance pays the required premium , it is known as which of the following?

Consideration

which life insurance settlement option guarantee payments for the lifetime of the recipient

Life income with period certain

What is the term for how frequently a policy owner is required

Mode

which of the following is NOT true regarding policy loans ?

Money borrowed from the cash value is taxable

Under standard circumstances at what point should the buyer guide be distributed to the prosepective buyer?

prior to the initial premium

A couple owns a life insurance policy with a Children's Term Rider. Their daughter is reaching the maximum age of dependent and permanent insurance in the near future. Which of the following will she need to provide for proof of insurability

proof of insurability not required

What is a definition of a unilateral contract?

One-sided only one party makes an enforceable promise

all of the following true regarding rebates EXCEPT

Rebates are allowed if its in the best interest of the client

If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?

A. 25% B. 10% C. 0%* D. 50%

Children's term riders attached to whole life policies are usually issued as what type of insurance ?

A. Adjustable life 'B. Whole life C. Term * D. Variable life

what is the main regulation on life insurance policy illustrations ?

To help producers to submit reports to the department of insurance

which of the following is NOT an exclusion to the requirement stating that no insurer may recommend of an insurance transaction unless the recommendation is suitable for the consumer ?

contracts designed for senior citizens.